Talisman, boosted by Repsol talk, may be worth more in pieces

CALGARY/TORONTO, July 24 (Reuters) - Canadian oil and gas
producer Talisman Energy, approached by Spain's Repsol
for talks over a potential deal, may find that its
appeal lies more in its individual assets than as a candidate
for a complete takeover.

Talisman, which has a market capitalization of nearly $11
billion ($10.2 billion), has long been considered a takeover
target as its stock slumped on weak natural gas prices.

Its far-flung global operations include attractive assets
stretching from Texas to Vietnam. But it also owns assets in the
North Sea that have consistently missed production targets.

Bankers, former investors and analysts say the Calgary firm
will not lack for suitors for its individual assets. But taking
on the entire company, which has been in midst of restructuring
that has seen it cut debt and trim operations, may be a tough
ask, partly because its assets are disparate.

"Everyone is looking at tuck-in assets like conventional oil
and conventional gas and deepwater oil that they can add to
their portfolio and keep the growth curve going," said an energy
banker familiar with Talisman who asked not to be identified.

"I think that a sale of the company is not going to happen,
because I don't think the final price per share would be fair
for them, or particularly attractive."

The banker said a more likely scenario was a bidding war for
Talisman's more lucrative assets, such as those in Southeast
Asia which are seen as its crown jewels. These include oil and
gas assets in Indonesia, Malaysia and Vietnam expected to
generate a large part of its 2014 cash flow.

"The assets that people want are the assets that everybody
wants," he said.
Continued...